Is Texas Still ‘Widely Open for Business’ for Bitcoin Mining?
Until fairly recently, Texas was “very open for business, as it were, for Bitcoin mining.” That’s how Jaime Leverton, CEO of Canadian Bitcoin miner Hut 8, put it in the latest episode of Decrypthis gm podcast.
“They especially in West Texas have a lot of renewable assets that are looking for stable baseloads that a Bitcoin miner can provide,” she said. “So I think there was just a really good fit between the government’s needs and what a Bitcoin miner could uniquely offer as an industrial-scale battery.”
The symbiotic relationship has worked because unlike data centers, whose always-on client agreements make voluntary termination impossible, Bitcoin miners can cut power consumption when there is high demand online. (“We scale up and down within minutes on a regular basis based on the needs of the grid,” Leverton said.) And so far, the Electric Reliability Council of Texas (ERCOT) has been willing to extend incentives to miners who do.
But a bill introduced in March, Texas Senate Bill 1751seeks to limit benefits given to Bitcoin miners who cut their power consumption when Texas, which has a power grid independent of the rest of the US, experiences high demand.
On Tuesday, the bill was unanimously approved in a vote in the state Senate.
It still needs approval from the full Senate before going to the state House of Representatives and then Gov. Greg Abbott’s desk. But Texas Blockchain Council President Lee Bratcher sees the bill as cause for concern.
He told Decrypt in an email that he expects it to win approval in the Senate but not the Texas House.
“SB-1751 is a concerted effort by established industry groups in the ERCOT market to tilt the playing field in their favor because they cannot compete with Bitcoin miners in terms of load flexibility,” Bratcher said.
On TwitterSatoshi Act Fund CEO and co-founder Dennis Porter said he and Pierre Rochard, Riot Platform’s vice president of research, spent 8 hours in the Texas capitol on Tuesday, “to share our opposition to the anti-#Bitcoin mining bill in the Senate.”
Meanwhile, Hut told 8 Decrypt in an email Wednesday that although the company will soon have operations in the state once it completes its pending merger with US Bitcoinit will not comment on the bill at this time because it does not currently mine in Texas.
Despite this, Hut 8, which trades on both Nasdaq and the Toronto Stock Exchange under the ticker HUT, was among the publicly traded mining companies to fall the day after the SB-1751 vote. The shares stopped trading down 6 percent on Wednesday.
Similarly, Marathon Digital ( MARA ) was down 7%; Riot Platforms (RIOT) fell 4%; and Kanaan (CAN) fell 2%.
Andrew Asmakov contributed reporting to this story.
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